Is going off-grid really better for the environment?

A number of consumers are moving towards household-level renewable energy, fed up by slow progress in decarbonising the grid. It’s time utilities started rethinking their game plan, says Aurecon’s Victor Young.

As renewables become affordable, more and more people are cutting their wires and adopting a minimalist lifestyle – particularly in rural areas where the cost to connect to the grid is high. For city dwellers, however, powering our lives in this manner isn’t cost-effective given the home-ground (i.e. ‘sunk cost’) advantage the existing grid has over emerging technology.

Living off the grid and expecting the same reliability (99.999 per cent) requires a huge amount of equipment, even for one household. A reliance on the sun and limited battery storage makes it difficult to meet typical evening peak energy needs unless you’re happy to go without a television, a fridge and washing machine.

Today’s batteries last 10 years before needing to be replaced… and then discarded. With the carbon impact of manufacturing, supplying and disposing of these batteries – how environmentally friendly is this, really?

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If the grid doesn’t use fossil fuels, then there is limited incentive for people to move to household-level renewables.

All the while, the rest of us who are still connected to the grid are reducing our energy consumption by changing wasteful behaviour and using energy-efficient appliances. For energy utilities, this means an oversupply of capacity and lower revenues. Big spending on distribution system upgrades in the last decade has compounded their woes.

Have we reached a tipping point for utilities to start repurposing the grid and changing their business model? People are likely to continue installing solar cells, even as government subsidies reduce, until such time as the grid decarbonises. If the grid doesn’t use fossil fuels, then there is limited incentive for people to move to household-level renewables.

Founder of Global Sharing Week, Benita Matofska says: “Traditional businesses can either fly the flag for the status quo and go down with it, or they can be smart about it and enable a new way of thinking, living and doing sustainable business. Those who do will survive and thrive.”

Just one of the opportunities for energy utilities derives from the notion that household renewable assets needn’t always be consumer-owned.

Companies like SolarCity are emerging, which provide solar panels that you can lease rather than buy. Should energy utilities focus on looking for ways to work with start-ups to facilitate the roll-out of solar and storage at scale?

And who said that the renewable energy generated by each household can’t be shared? Imagine subscribing to energy via a sharing platform and using an app to trade energy with other people and businesses.

To make this future smart city scenario possible, we need to continue to invest in emerging technologies, to commercialise the ones that show promise, and to optimise the ones we already know work well. Tesla’s PowerWall is today’s high-profile home battery storage product, but there’s no shortage of players lining up to compete, ultimately putting downward pressure on costs, which will drive further mass market appeal and adoption of these smart solutions.

The switch to renewable energy has already been flicked. Smart utilities that are willing to drive change toward a cleaner future will prosper – but it’s going to take the turning off of a lot of old paradigms to do so.

Victor Young is Market Director, Energy, Oil & Gas at Aurecon. This post was republished from Aurecon’s Just Imagine blog with permission.

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